Chapter 4: Developing the Right Market Mix

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Transcript Chapter 4: Developing the Right Market Mix

Entrepreneurship and Small
Business Management
Chapter 7
Developing the Right Marketing Mix
and Plan
Ch. 7 Performance Objectives
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Combine the four Ps—product, price, place,
and promotion—into a marketing mix.
Choose the attributes of your product or
service.
Determine the mix of promotion to use for
your business.
Find a way to add the fifth P, philanthropy,
to your business.
Entrepreneurship and Small Business Management, 1/e
By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Ch. 7 Performance Objectives
(continued)
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Understand the importance of a
marketing plan.
Identify the critical components of a
marketing plan.
Use breakeven analysis to evaluate
your marketing plan.
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By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Mix: The Four Ps
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Product—What are you selling?
Price—What does the price “say” about
your product?
Place—What is the best location for
your business?
Promotion—How will you advertise and
publicize your product?
Entrepreneurship and Small Business Management, 1/e
By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Create Your Product Concept
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Products are defined by:
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Physical attributes
Performance characteristics
Pricing
Branding
Delivery
Key to successful branding: focus on
the product’s primary benefit
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Establish Your Brand
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Choose an easy-to-remember name
that describes your business.
Design a logo that symbolizes your
business.
Develop a good reputation.
Create a brand “personality” and
communicate it to your target market.
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Build Your Brand’s Reputation
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Provide a high-quality product/service.
Maintain high ethical standards.
Define the product/service clearly.
Treat employees well.
Make ads positive and informative.
Associate the company with a charity.
Be involved in the community.
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Price Considerations
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Simply undercutting competitors’
prices will not necessarily win you
the largest market share.
Consider the psychology of pricing:
consumers tend to infer things about
a product/service based on its price.
Entrepreneurship and Small Business Management, 1/e
By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Place
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The type of business affects the
location that works best.
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Who are your customers?
Where do they shop?
Goal: Find a location affordable for you,
yet also convenient for customers.
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Promotion
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Promotion—use of advertising and
publicity to get your marketing
message to your customers.
Advertising—purchased promotion
(billboards, TV ads, magazine ads, etc.)
Publicity—free mention of a company,
person, or product/service in the media
Entrepreneurship and Small Business Management, 1/e
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Promotion Methods
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Advertising specialties
Banner ads
Billboards
Blogs
Broadcast media
Brochures
Business cards
Catalogs
Coupons
Direct mail
Directories
Flyers
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Networking
Newsletters
Print media
Promotional clothing
Public speaking
Samples/demos
Special events
Sponsorships
Telemarketing
Toll-free numbers
Web sites
© 2012 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Philanthropy: The Fifth P
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Philanthropy—a concern for human
and social welfare, expressed by giving
money through charities/foundations
Foundation—not-for-profit organization
that manages funds donated to help
people and social causes
Philanthropy creates goodwill—
favorable reputation, name recognition,
and positive customer relations
Entrepreneurship and Small Business Management, 1/e
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Cause-Related Marketing
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Inspired by a commitment to a social,
environmental, or political cause
Simple way to work philanthropy into
your business
Examples:
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Donate fixed % of revenue to charity
Donate products/services
Encourage employees to volunteer
Entrepreneurship and Small Business Management, 1/e
By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.
Roles of a Marketing Plan
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Convince skeptical investors that your
plan has merit.
Use and disclose market studies.
Identify the target market.
Evaluate the competition.
Demonstrate the pricing strategy.
Detail the advertising plan.
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Plan Components
Components
Stand-Alone Bus. Plan
Plan
Section
Opportunity Analysis:
X
• Industry Analysis
X
• SWOT Analysis
X
• Environmental Analysis
X
• Competitive Analysis
X
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Plan Components
Components
Stand-Alone Bus. Plan
Plan
Section
Marketing Analysis:
X
X
• Overall Market and Target
X
X
• Goals and Objectives
X
X
• Marketing Strategy
X
X
Product/Service
X
X
Pricing Strategy
X
X
Promotion Strategy/Plan
X
X
Place/Distribution
X
X
Philanthropic Plan
X
X
Entrepreneurship and Small Business Management, 1/e
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Marketing Plan Components
Components
Stand-Alone Bus. Plan
Plan
Section
Marketing Analysis (continued):
• Future and Contingency Plans
X
X
X
X
Financial Projections
X
Implementation Time Line
X
Measurement
X
Supplemental Materials
X
Entrepreneurship and Small Business Management, 1/e
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
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Can You Afford Your
Marketing Plan?
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Marketing is part of your business’s fixed
costs and should not be budgeted as a
percent of sales.
Calculate breakeven units to determine if
the business can cover marketing costs with
the number of units you expect to sell.
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Breakeven units = Fixed cost (per month or
per year) divided by gross profit per unit
Entrepreneurship and Small Business Management, 1/e
By Steve Mariotti and Caroline Glackin
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© 2012 Pearson Education, Upper Saddle River, NJ 07458.
All Rights Reserved.